Managers look for tactical plays on US crisis

US investors sheltering in cash as politicians grapple with the debt crisis are set to reinvest during a short-term correction they said could see equities sell off as much as 10%.

Over the weekend US president Barack Obama announced Republican and Democratic leaders have hammered out a framework for a deal on raising the US debt limit and avoiding default. But Congress is yet to approve the deal and votes in both houses will take place today. Under the proposed deal, the debt ceiling will be raised by $2.4trn, and Congress will work to reduce the deficit by a similar amount over the next decade. Most managers have already ruled out a default, which would most likely prompt a return to recession and impact markets worldwide. But despite the fact politicians h...